In economics, a public good: A. Is any good produced by the government. B. Has social...
In economics, a public good: A. Is any good produced by the government. B. Has social costs that are lower than private costs. C. Is provided in an optimal amount by the market. D. Cannot be denied to consumers who do not pay.
Homework Answers
Answer) Option-D
A public good is a good which is non-rival and non-excludable in nature.
Non-rivalrous good means that to produce an extra unit of a good, no marginal cost is required.
On the other hand, non-excludability means that no one can be excluded from the consumption of the public good.
Even if an individual does not pay for the well such as infrastructure (road, bridges, amusement parks etc.), then also he/she can consume the good.
Other options are not valid as follows:
(i) The market cannot provide these goods efficiently as some individuals might not reveal their true willingness to pay for the good.
(ii) Social cost is not related to the public good , rather it is the external cost imposed on the whole society due to any illegal/ ineeficient activity.
(iii) Public goodcold be produced by private market as well or it could be available naturally.
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